Karen runs a Software-as-a-Service (SaaS) company five years ago. With a little bit of marketing background, she invested in a wide variety of marketing channels – such as billboards, radio, SEO, and social media. At the end of the fifth year, although there are customers using Karen’s SaaS, her company is still in a loss. Karen is about to file for bankruptcy.

While Karen is right about not putting all her marketing eggs in one basket as it helps her reach a wider customer base, she overspent without getting enough new customers.

Here is a key performance indicator that Karen could have used to measure her startup: CAC.

CAC shorts for Customer Acquisition Cost refers to how much it is to acquire a new customer. This metric is widely used in the SaaS industry and companies that employ a subscription-based business model.

What is CAC?

CAC helps you optimize the return on investment in sales and marketing as well as assists in future marketing decision-making. By calculating CAC for each marketing channel, you can compare which channel yields the highest return and is the most effective. You can then choose what channels to keep and remove.

How to obtain CAC?

Sales and Marketing Expense refers to all amounts spent to acquire new customers during a predetermined period, including all remunerations paid to market and sales personnel. CLV site provided more elements, including the amount spent on promotion and online, discounts given as a sales incentive, and the cost of fulfilling the initial customer order.

Number of New Customers is simply the number of new customers that you acquired during the predetermined period.

You would want to have a lower CAC, as it implies that you are spending effectively.

How to obtain CAC easier?

CanCan helps you obtain your CAC whenever you want – you do not have to wait until your accountants close the monthly books and calculate the numbers manually for you. Under this latest module in CanCan, you can obtain CAC at any time of the day.

Here is how it works: a list of accounts related to customer acquisition is built-in, and they will be automatically included in the CAC calculation. From your end, you can just record the expense regularly as your company operates. When you wanted to see the CAC, it is calculated for you within a few clicks. You will also have the flexibility to edit the accounts for the calculation.

We want to see you succeed. Monitor your CAC now and don’t be Karen.

Please contact us at https://en.cancangroup.com/about-us/#contact or visit our website https://cancangroup.com/ if you have more issues.